The waves of problems created by the deadly explosion at Transocean's (RIG, news, msgs) Deepwater Horizon oil well continue to wash over the economy.
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Transocean
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And somewhere in that list of casualties you should add national energy policy.
Certainly, any national energy policy that's built on cap and trade or a carbon tax or any other mechanism for fighting global climate change is now dead. And maybe even the kind of smaller, focused energy bill that Senate Majority Leader Harry Reid, D-Nev., started to talk up last weekend.
One of the strange consequences of the Deepwater Horizon disaster is that it has reduced the chances for any kind of comprehensive energy plan in the near future to between slim and none.
It's not because the United States doesn't need a national energy policy. It does, desperately. The disaster in the Gulf of Mexico just makes that clearer.
The 987-page plan once included provisions for expanding offshore oil exploration and production, but those were stripped out of the version introduced May 12 and replaced with a provision that would give states the right to veto any drilling plans. That would have the effect of limiting drilling off the Atlantic and Pacific coasts.
It's hard to see how Kerry and Lieberman can bring oil-state Democrats and any Republicans at all on board with that language.
I can see a chance for a bill that creates something like a scaled-down version of a national energy policy but not the version that Reid highlighted over the weekend as his alternative to the Kerry-Lieberman plan. Reid seemed to indicate that he'd like to move forward on a reduced plan modeled on the legislation that the Senate Energy and Natural Resources Committee approved last June with four Republican votes.
But I don't see how even that bill flies in the current post-disaster environment. The smaller plan would include a national mandate that utilities generated a percentage of their electricity from renewable sources, stepped up energy-efficiency standards, incentives to build out the power supply grid, and subsidies and loans for energy production from such low-carbon sources as solar and wind.
Yet it also includes provisions that would expand oil and gas drilling in the Gulf of Mexico. That was a critical feature in gaining the bill the votes it needed in committee. With those drilling provisions stripped out, as is likely in today's post-Gulf-disaster environment, I think this bill, too, goes nowhere.
Smart politicians could cobble together a new coalition that used support for policies to encourage the use of natural gas as the new bargaining chip to replace the drilling bargaining chip. And I think smart politicians could recast an energy bill to harness some of the anger the oil spill has generated. An effort that appealed directly to our national interest in increasing domestic security by reducing dependence on foreign oil and on increasing U.S. competitiveness and employment could help sell such a proposal.
Smart politicians are always in short supply, however, and I think the odds against this effort are formidable. They're not impossible, but they remain unlikely as long as politicians stay focused on using the emotions of the moment to bash some target.
